Conducting Foreclosure Proceedings When Fannie Mae Is the
Mortgagee of Record

The servicer must conduct the foreclosure in Fannie Mae’s
name when Fannie Mae is the mortgagee of record for all mortgage
loans except for regular servicing option MBS mortgage loans that
are secured by properties located in Utah or Mississippi. For these
mortgage loans, the servicer must request that Fannie Mae reassign
the mortgage loan to it so the foreclosure can be completed in the
servicer's name.

The servicer must execute any required substitutions of trustees
when Fannie Mae has granted the servicer its LPOA to do so on Fannie
Mae's behalf. However, if state law or customary practice prohibits
an attorney-in-fact from executing substitutions of trustees, the
servicer must submit the substitution of trustee documents to Fannie
Mae for execution before the foreclosure proceedings begin.

Conducting Foreclosure Proceedings When the Servicer Is the
Mortgagee of Record

When the servicer is the mortgagee of record for a mortgage
loan, the jurisdiction in which the security property is located will
affect how the foreclosure proceedings are conducted or initiated.

In most states, the law firm must initiate the proceedings
in the servicer's name when the servicer is the mortgagee of record or
in the participating lender's name when the servicer is not the
mortgagee of record for a participation pool mortgage loan. The
law firm must subsequently have title vested in Fannie Mae's name
in a manner that will not result in the imposition of a transfer
tax.

The servicer and the law firm must determine the most appropriate
method to use in each jurisdiction.

In any state or jurisdiction in which the foreclosure proceedings
must be conducted in Fannie Mae’s name to prevent the imposition
of a transfer tax (such as Rhode Island; New Hampshire; Maine; or
Orleans Parish, Louisiana), an assignment of the mortgage or deed
of trust to Fannie Mae must be prepared and recorded in a timely
manner to avoid any delays in the initiation of the foreclosure
proceedings. If the servicer believes that a foreclosure proceeding
must be conducted in Fannie Mae’s name in any other jurisdiction
to prevent the imposition of a transfer tax, the servicer must contact
Fannie Mae’s Legal department (see F-4-03, List of Contacts) for permission to do so.

When Fannie Mae’s DDC or third-party document custodian
has custody of an original unrecorded assignment of the mortgage
to Fannie Mae, the servicer may either

request return of that document so
it can be recorded, or

prepare a new assignment if doing so will expedite
the process.

Once the assignment to Fannie Mae has been recorded, the foreclosure
proceedings must be conducted in Fannie Mae’s name.

Conducting Foreclosure Proceedings When MERS Is the Mortgagee
of Record

The servicer must not name MERS as a plaintiff or foreclosing
party in any foreclosure action on a Fannie Mae mortgage loan. When
MERS is the mortgagee of record, the servicer must prepare an assignment
from MERS to the servicer and bring the foreclosure in its own name
unless Fannie Mae specifically allows the foreclosure to be brought
in the name of Fannie Mae. In that event, the assignment must be
from MERS to Fannie Mae, in care of the servicer at the servicer's
address for receipt of notices. The assignment must be prepared
and provided to the law firm in the referral package.

Fannie Mae will not reimburse the servicer for any expense
incurred in preparing or recording an assignment of the mortgage loan
from MERS to the servicer or to Fannie Mae. If the borrower reinstates
the mortgage loan prior to completion of the foreclosure proceedings,
re-assigning and re-registering the mortgage loan with MERS will
be at the discretion and expense of the servicer.

The servicer must consult with the law firm to determine if
any other legal requirements apply when conducting foreclosures of
mortgage loans in which MERS is the prior mortgagee of record. See Additional Required Foreclosure Referral Documents in E-1.1-02, Required Referral Documents for
additional information regarding MERS and proper assignments.